Appellate Panel Grants FanDuel, DraftKings Another Stay, Allowing Them To Continue Operating In NY

draftkingsBack in December, DraftKings and FanDuel announced that despite a New York judge granting the state a temporary injunction that barred the daily fantasy sports (DFS) sites from operating in New York, they’d won an immediate stay that would allow them to keep their virtual doors open for business in that state. An appellate panel has upheld that stay, making it permanent.

This new stay means the DFS sites can hold onto their customers for as long as it takes to have their appeal heard.

“We are pleased with the Court’s ruling today,” DraftKings’ legal eagle David Boies said in a statement. “Daily Fantasy Sports contests are as legal now as they have been for the past seven years that New Yorkers have been playing them. As our litigation continues, we expect an appellate court to see what we have known since the outset: DFS is a game of knowledge and skill, one that builds community and whose competitive spirit has become important to the lives of millions of people. Our ongoing appeal will make clear that daily fantasy contests require just as much skill as season-long contests, which the Attorney General recognizes as perfectly legal under state law.”

While DraftKings and FanDuel have argued that they offer games of skill, New York Attorney General Eric Schneiderman says the sites are a game of chance, and therefore, constitute a form of gambling, in violation of state law. In November, his office sent letters to both DraftKings and FanDuel telling them to cease and desist selling their fantasy sports betting services in the state.

“Our review concludes that DraftKings’/FanDuel’s operations constitute illegal gambling under New York law,” Schneiderman wrote in the letter.

The state filed a lawsuit against the companies a week later, alleging violations of state laws that prohibit the promotion of gambling and “repeated or persistent fraudulent conduct.”

Though a judge at first ordered DraftKings and FanDuel to stop doing business in New York, the companies won an emergency stay of that injunction. Today’s ruling upholds that stay.

“We are engaged with legislatures and Attorneys General across the country, including in New York, to ensure that our fans are able to experience our contests in a fun and fair way with appropriate and thoughtful consumer protections in place,” Boies said Monday, echoing the statement he made in December, when he said the company has been talking to state legislators in New York about a potential resolution that would allow DFS sites to continue doing business with New York residents.